We have significant growth ambitions in India: Amit Jain, Engie

We have significant growth ambitions in India: Amit Jain, Engie

French multinational energy giant Engie SA has been present in India since 2017, eyeing growth in the fast growing market here for energy transition. Identifying India as one of the key geographies for growth, the company is seriously evaluating prospects for building capacity in areas like solar power, offshore wind, green Hydrogen and energy storage, apart from transmission and gas infrastructure, Amit Jain, Country Manager – India tells ETEnergyworld in an exclusive interview. Edited excerpts.

How big is Engie’s existing portfolio in India and what is its significance for the larger Engie business globally?

Engie has a portfolio of around 1.3 GW in India. Around 1 GW of that is solar and the balance is wind. We have been in India since the acquisition of SolaireDirect in 2017. We are a utility player and are in the business of holding on to assets in the long-term. We currently have a partnership with Edelweiss for around 800 MW-odd assets where we have divested 74 per cent stake and we continue retaining 26 per cent share and we also continue providing O&M services to that platform. Apart from that, we have around 290 MW capacity in Gujarat which is 100 per cent owned by us and was commissioned during the pandemic last year. We also have 30 MW wind capacity in Gujarat and a 220 MW wind project in Tamil Nadu. In India, we have a team of around 100-odd people in offices and additional 100 people on the various project sites. That is broadly our footprint in India.

India is one of the major markets for Solar power for Engie. The company has four business segments globally. That includes Renewables, Thermal &; Supply, which covers Hydrogen and battery storage too, Energy Solutions and Supply Networks. Engie’s total global installed renewable energy portfolio is around 34 GW. Of this, around 18 GW is hydro, 12 GW is wind and 4 GW is solar. Of this 4 GW, 1 GW is in India. So, India is quite a significant solar market for us. In Solar, India is one of the top 3-4 countries where Engie is placed. We have significant ambitions for growth in India as it is one of the key countries for us.

Engie plans to add 4 GW of additional renewable energy generation capacity every year till 2025. That means you plan to add 12 GW RE capacity in three years. What part of this would be based in India?

Engie has a global target of commissioning 4GW of Renewable Energy capacity every year and has recently decided to focus on about 35 countries from the 70 countries that Engie used to operate in. India is part of the list of 35 countries that Engie plans to participate in and grow its renewable portfolio and sees it as a key country within the AMEA region. The targets will depend upon where the opportunities come up. With the recent changes in regulations in India, including more stability on safeguard duty front and BCD, etc, there is less uncertainty in the market now. Therefore, we have been participating in the tenders here and will continue to do so. That is a major push. The second push is coming from corporate PPAs. We see India as a more mature market for the C&I segment. Engie specializes in providing complex energy solutions. In the US, for example, we provide a mix of green energy products to clients. As a solution, this is different from the plain vanilla approach of setting up solar parks, for instance. These are the two areas we are looking at. Battery storage is a part of this focus, because it helps address the issue of intermittency of green power. We look at storage from the point of view of meeting select customer needs. Storage prices are still very high.

From the point of view of gaining from Engie’s global experience and footprint, which business segments do you see growing for the company in the future in India?

Today, we are present only in renewables. We are yet to enter into battery storage in India. The Thermal & Supply segment covers storage and hydrogen. Hydrogen is a buzzword today and globally Engie is implementing around 70 pilot projects in Hydrogen. That is mostly in countries where Hydrogen use is being mandated by the government. We understand that in India, too, the government is likely to announce new guidelines mandating the use of Green Hydrogen for industries to meet a part of their energy use. That is a step in the right direction. This policy support is going to be required for the market to grow. Of course, pricing is a big question as the cost base of Hydrogen is expected to reach parity around 2030. Beyond this, our growth in areas like gas and networks would be based on opportunities but we are looking at all the possible avenues for growth in terms of what Engie has to offer. We want to cover the entire breadth of Engie services.

We are also looking at the offshore wind market in India. We have been talking to the policymakers, trying to understand how this market will evolve. Globally, we have a JV with EDPR. Their team visited India a few weeks back and met the stakeholders to understand the market and see whether Engie can make a play here. We are looking at it as a long term play. Globally, we have huge offshore wind operations and, hopefully, will be able to do something in India too, given the government’s big target to develop 4 GW of offshore wind capacity. It is important to remember that offshore wind is a very different play. It requires massive infrastructure building and a visibility on the continued pipeline of projects. The Indian government seems to be taking the right steps on this.

Are you saying that Engie would participate in the bids for offshore wind as and when they are invited?

There have to be a few clarifications on the regulatory side, in terms of understanding how the pipeline of projects would work – whether there would be VGF for projects or whether the government would provide the exploration rights and how would this work with the state governments involved.

When it comes to evaluating the potential of the Indian renewable energy sector, foreign investors generally highlight issues like pending receivables from discoms and lack of policy consistency regarding import duty on equipment, etc. As a large foreign investor, how does Engie view these issues?

There is no market in the world which is risk-free. Solar is a much regulated market globally. The important thing is that we understand the risk involved as we have been in India for long. The investors need to factor in that risk in the pricing or the bids. India has seen a lot of projects that were bid out at low tariffs recently and not constructed. We do not want to be in a scenario like that. We want to ensure that we build what we commit to.

So, how do you plan to grow the 1.3 GW-odd portfolio you have in India? Are you working on targets for the next few years?

We are exploring partnerships in India very seriously and that could be across the renewables business. We believe in working with partners who have complimentary skills. We are a long term industrial player. So, we have skills in engineering and procurement etc. Other players may have skills around the areas where we do not have a presence in India. So, we could look at a financial partner or it could be someone who has a development pipeline. There are different models that we are currently evaluating, as to what the strategy for a partner in India could look like.

Can you share any estimates of the capex you plan to deploy in India?

Globally, Engie has identified a growth capex of around 4.3 billion Euro. A sizable part of this would be renewables. But, like I said, we do not have a country-specific number and the capex would be based on opportunities that become available.

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